Can You Purchase Too Much Insurance?

There is a great article on the Wall Street Journal's site written by Jessica Silver-Greenberg entitled "Don't Buy Too Much Insurance!" which talks about the concerns over buying insurance policies that may not be worth your money.  This is very interesting information because it goes against what many individuals believe to be necessary.

Many consumers think the more insurance you carry the better.  If you can afford the monthly premiums, why not protect yourself in all aspects from life insurance to renters insurance.  This author points out that there are some insurance policies out there that may not be worth your money, but ultimately this is going to be your decision after consulting with a financial expert.

People are feeling vulnerable during these tough times and may be quick to buy insurance without fully evaluating the benefits.  When it comes to life insurance, most experts agree that it is a good idea to carry protection.  There are certain policy types and riders that may not be worth your money though.  This article touches on juvenile life insurance offered from companies such as Gerber Insurance.  Robert Hunter, the director of insurance for Consumer Federation of America and a former Texas insurance commissioner, recommends increasing the parent's coverage since the likelihood of that being used is greater, plus if the bread-winner's income is lost, it would be far more financially devastating.

Hunter also goes on to say that the savings aspect of these types of policies may not be your best option.  There are many college savings plans available to parents and grandparents that offer great rates and it's important to review all options when choosing a way to save for your child's future.  This doesn't mean that purchasing a life insurance policy for your child is a waste of money, it just means there may be better options out there that you have not considered.

When it comes to all forms of insurance, be sure to shop around and fully evaluate your need for a certain type of policy.  Some insurance types such as auto insurance and homeowners insurance are generally required, but this doesn't mean you shouldn't shop around.  Getting the best deal on an insurance policy is possible with the right amount of research and effort.  As always, we suggest meeting with a financial expert to sort through your individual circumstance so you choose the best insurance policies to meet your needs.